edit: who determines this?
Administrators.
It would be awesome to make the scammer mark invisible to the scammer so they keep on longer than optimal with the same account.
The idea is to give them an opportunity to defend themselves or make things right. I have removed the status a couple of times after the users paid back their victims.
I instituted this system because people were pressuring me a lot to ban scammers, which I was unwilling to do. I do not want to be the final arbiter in these matters. So I created this status to warn potential victims without preventing the scammer from defending himself.
People marked as scammers are also unable to delete/edit any of their posts or modify their profiles, and their IP addresses are banned from creating new accounts.